Closing the loop: Forging high-quality agile virtual enterprises in a reverse supply chain via solution portfolios

Reverse supply chains are receiving increased attention for business and sustainability opportunities. As few organizations are adept at both forward and reverse supply chains, subcontracting various activities is imperative. Vendor selection that best achieves combined expertise for reverse supply chains, while quickly forming virtual enterprises to seize market opportunities, is an emerging issue. We formulate a novel 0-1 integer nonlinear optimization model, subsequently linearized to enable efficient computational performance, to select vendors that minimize the maximum formation time for creating agile virtual reverse supply chains. We then generate a portfolio of diverse, high-quality vendor assignments by adapting a recent algorithmic technique, thereby allowing industrial managers to address intangible factors into their final decisions. Computational experiments on simulated data demonstrate the model’s efficiency for generating sets of high-quality and diverse solutions in reasonable timeframes.